As the public awaits congressional action on possible repeal of Obamacare, President Donald Trump could exercise his executive power to cancel cost-sharing subsidies. That would affect insurance prices, but Trump has been purposely vague on what he'll do.(Reed Saxon, Associated Press)

WASHINGTON - As Congress struggles to repeal and replace the Affordable Care Act, a different, far less visible problem is playing out in state capitals and in health insurance offices across the country.

This is rate-setting season, the time of year health insurers must tell state and federal regulators how much they plan to charge for premiums, starting in January. The filing deadline for Ohio insurers is Monday, June 5.

Companies including Medical Mutual of Ohio, Anthem Blue Cross and Blue Shield, Akron-based Summa and Canton-based AultCare have no firm idea how much to charge -- and it's not because of the healthcare bill stirring up so much dust among the public. Rather, it's because of a political calculation by President Donald Trump over an arcane feature of the Affordable Care Act, better known as Obamacare.

Trump hasn't said whether the federal government will continue to make payments called cost-sharing reductions -- next year, or even next month. And he's hoping the uncertainty he creates drives Democrats to get on board the Obamacare repeal-and-replacement bill he backs, called American Health Care Act.

If the cost-sharing reductions stop, companies will have to raise rates dramatically -- if state and federal governments let them amend those rate requests -- or exit the Obamacare market. Healthcare policy analysts say Trump is playing a reckless game.

"It's either a total misunderstanding of the market or an attempt to destroy it," J. B. Silvers, a former insurance executive who teaches health care finance at Case Western Reserve University's Weatherhead School of Management, said. "There's no middle ground."

"Unfortunately," said Sabrina Corlette, a research professor at Georgetown University's health policy center, "I do think the president perceives the CSRs as some kind of bargaining chip."

The Trump administration and House of Representatives Republicans say Obamacare, not Trump, has been reckless from the start.

Let's explain.

What it's about:

Health insurers are at the mercy of Trump's executive power over cost-sharing reductions. The feature is one way the federal government until now has picked up a share of health care costs for the working poor.

Cost-sharing operates behind the scenes, with the government paying deductibles, co-payments and coinsurance to keep health care affordable for about 7 million low-wage Americans. It is largely unrelated to the taxpayer subsidies that individuals get to help pay their monthly insurance premiums.

Trump is threatening to take away these cost-sharing payments.

Doing so could drive up insurance prices on the ACA exchange - the online sales channel on which ACA individual and family policies are sold -- by an average of 19 percent, according to calculations by the Kaiser Family Foundation. Unless the companies could recoup the money by suddenly raising premiums, the loss would drive more insurers from the market, because the ACA still requires that insurers provide the price breaks - and insurers say they cannot afford to absorb them.

Without a way to recapture the cost, "we would likely have to exit on the exchange," Doug Bennett, who directs individual market sales for Medical Mutual, said.

Trump won't say what he plans to do, although the White House recently said it wants another 90 days to decide how to proceed in a court case challenging the cost-sharing payments. In a different discussion, Trump budget Director Mick Mulvaleny told Congress last week that the White House hasn't yet decided on whether it will even make cost-sharing payments for June.

Time isn't on their side:

Insurers are making assumptions. Medical Mutual and AultCare told cleveland.com they decided to assume they will keep getting the cost-sharing reimbursements, acknowledging the choice was little more than a flip of the coin.

"We're going to assume that cost sharing continues," said Mike Novelli, vice president of individual sales at AultCare.

They had no choice, so "that's the assumption we picked," said Steffany Larkins, executive vice president and chief marketing officer of Medical Mutual.

Several other Ohio insurers have not responded to requests for interviews or information. But in California, state regulators advised insurers that since they must guess, they can file two different sets of rates, one with the assumption that the federal government will keep providing the subsidies, the other that it won't.

"My continued hope is that President Trump stops undermining the ACA and instead enforces and funds it, and that the House Leadership stops efforts to pass legislation to repeal or otherwise undermine the ACA," California Insurance Commissioner Dave Jones wrote in a guidance letter to insurers in April.

In North Carolina, Blue Cross Blue Shield of North Carolina filed its rate-hike request for 2018 on the assumption that the subsidy will disappear. It therefore requested premium hikes averaging 22.9 percent.

"The biggest single reason for the sharp increase in rates is the lack of federal funding for 'cost-sharing reductions' beginning in 2018," Brian Tajlili, the company's director of actuarial and pricing services, wrote in an explanation.

This is not the first time politics have changed expectations for insurers. Ohio insurers are owed millions they may never see from a different Obamacare feature, and they cannot make up for those losses by asking for more money in their 2018 rate requests. But this is the first time politics have directly required them to make rate-setting assumptions based on anything other than actuarial tables, mathematical probabilities and government guarantees.

"We're making decisions for six months from now and we don't know the rules," said Medical Mutual's Bennett.

How we got here:

Trump supporters, including many House of Representatives Republicans, say Obamacare is sinking under its own weight, with higher prices and fewer consumer choices of insurers and in-network providers. If it goes under, they say, don't blame the president.

"Obamacare is collapsing because of the law's fundamentally broken structure--and it is only going to get worse," said Olivia Hnat, spokeswoman for Rep. Pat Tiberi, a Republican from Columbus who was involved in writing the House repeal-and-replace American Health Care Actthat Trump supports.

The bill would cut future Medicaid spending, giving more power to states, and change the subsidy structure that helps people pay their premiums. Some people would get more financial help, but older and poorer people could see their premiums rise and their subsidies lag. The government would save money on healthcare spending since fewer people -- 23 million fewer by 2026, according to the Congressional Budget Office -- would be covered.

"That is why the House started the process of repealing and replacing Obamacare by passing the American Health Care Act," Hnat said. "As the Senate considers these reforms, Rep. Tiberi is also urging the administration to continue to take steps that will stabilize the healthcare market and ensure that we transition to a new system that lowers costs, increases options and gives Americans access to the coverage they want and need."

The ACA, passed by Democrats in 2010 when they controlled Congress and signed by Democratic President Barack Obama, provided several ways for people who lacked health insurance to get it, with taxes on high earners, insurance companies and medical device sales helping pay for the plan. It expanded Medicaid to cover near-poverty-level families and provided payments for private insurance premiums for other Americans. It was supposed to help insurers deal with money losses in the startup years, although the Republican Congress subsequently limited those payments.

The cost-sharing reduction helped bring down the cost of care for people with incomes up to 250 percent of the poverty level, or nearly three out of every five people with ACA coverage. It paid for co-payments, coinsurance and deductibles.

Patients don't actually see these dollars because they flow from the government directly to insurers. But that means patients save money. The Department of Health and Human Services spends $7 billion a year on this. But that creates what has turned out to be a political problem: Republicans in Congress said HHS had no authority to spend this money without an explicit appropriation from Congress. And Congress never passed such an appropriation.

President Barack Obama's administration appealed in the U.S. Court of Appeals for the District of Columbia, and the lower court decision was stayed for the appeal. Then Trump won office and inherited the case. He had to decide whether to drop the appeal, which would end the case - and end the payments.

The ball is in the president's hands:

For a president adamantly opposed to Obamacare, the decision might seem easy. But Trump has asked the appeals court to let him think it over for another 90 days. His most recent request, with House Republicans agreeing, was on May 22, delaying the matter until as long as August.

Trump has said that while he doesn't want people to get hurt, he wants to use the uncertainty the waiting creates to get Democrats to agree to the American Health Care Act, telling that to the Wall Street Journal in April. "What I think should happen--and will happen--is the Democrats will start calling me and negotiating," the president said.

The head of the Centers for Medicare and Medicaid Services, Seema Verma, had a similar message for health insurers in an April meeting, telling them they should get behind the House Republican bill too, according to the Los Angeles Times. Most oppose the bill.

The Centers subsequently disputed the Times account, but the newspaper said it based its story on interviews with multiple industry officials who attended the meeting. Neither the agency nor its parent department, HHS, has responded to cleveland.com questions on cost-sharing.

Democrats say Trump is playing a tough game that might work in real estate development, his previous occupation, but is cruel and dangerous when it comes to insurers and their patients.

"These reimbursements make it possible for Ohioans to get cancer treatment, afford life-saving medicines and take their kids to the doctor," said U.S. Sen. Sherrod Brown, an Ohio Democrat. "These are people, not bargaining chips -- holding them hostage is not only wrong, it's creating a dangerous uncertainty that is raising prices for everyone."

What happens now:

Most state insurance departments have rate request deadlines by early June, and Ohio's is June 5. Insurers also must send copies of their requests to HHS by June 21.

State regulators will ask questions that could prompt insurers to change their requested rates or policies. Then HHS will have final approval, and by fall, potential customers generally start shopping for health care, although Trump has proposed pushing back the start of sales to Nov. 1. Because of restrictive insurance laws in Ohio, some of the requested premiums might not be made public for months.

What will happen if Trump decides to cancel cost-sharing reimbursements once their premiums are set? It's unclear. The Ohio Department of Insurance says it can only operate under the law and policies that exist now.

"Should laws be revised in the future, we'll change our processes accordingly," said Robert Denhard, a department spokesman.

Other shoes could drop:

Cost-sharing subsidies are the most immediate uncertainty. But there are others:

Trump could have the Internal Revenue Service stop enforcing the law's individual mandate, which requires a fine for anyone who goes without health insurance. Without enforcement and fine collection, the individual mandate effectively dies, changing the dynamics of the marketplace. If healthier people opt out, costs for the remainder could rise, with experts from Georgetown University's Health Policy Center saying that alone could lead to a 20-percent price bump.

The Senate could come up with an alternative to the House-passed American Health Care Act. The House bill gets criticism from groups that say it would leave older and sicker Americans with more expensive insurance and dump coverage for too many Medicaid patients. Enough Senate Republicans seem to share that concern that the House bill is unlikely to be the last word.

Both houses of Congress could fail to agree on a bill because of these kinds of differences. That could leave Obamacare in place.

Yet Trump may have other options. If he pulls the cost-sharing reductions without a deal from Democrats, he unquestionably could speed Obamacare's demise, though at risk of creating havoc and possible bankruptcies among insurers, say analysts.

So far, the administration has decided to continue the payments on a monthly basis. The next decision won't be until around June 20, insurers say.

"What I do know is that we made payments in May, like we said that we would," Mulvaney, Trump's budget director, told a Senate budget hearing last week. "We've made no commitments to the payments that are due in June and that we are considering all the options on whether or not we will make those payments."

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